China Energy Ltd : Reduction In Registered Capital Of A Wholly-Owned Subsidiary

CHINA ENERGY LIMITED (Company Registration No. 200510060K) (Incorporated in the Republic of Singapore) REDUCTION IN REGISTERED CAPITAL OF A WHOLLY-OWNED SUBSIDIARY

The Board of Directors of China Energy Limited (the "Company", together with the Company's subsidiaries referred to as the "Group") wishes to announce that Jiutai Energy (Zhangjiagang) Co., Ltd. ("Jiutai Zhangjiagang"), a wholly-owned subsidiary of the Group incorporated in the People's Republic of China ("PRC"), has been granted approval from the relevant authorities in Zhangjiagang, PRC, to reduce its registered capital by US$ 60.0 million from US$ 108.72 million to US$ 48.72 million ("Reduction in Registered Capital").
Jiutai Zhangjiagang's issued capital is currently held by Jiutai Energy Technology Co., Ltd. (a wholly-owned subsidiary of the Company) and the Company in proportions of
55% and 45% respectively. The principal activity of Jiutai Zhangjiagang is the production and sale of dimethyl ether ("DME").
The registered capital of Jiutai Zhangjiagang was US$ 108.72 million, of which US$
48.72 million has been fully paid up and US$ 60.0 million remains outstanding. The US$
60.0 million unpaid registered capital was meant for injection by the Group to finance the
DME Phase II development (to add 1.2 million tons of DME capacity) in Zhangjiagang.
The relevant authorities in Zhangjiagang had informed the Group that the land adjacent to our existing DME Phase I plant in Zhangjiagang, which was the intended site for our DME Phase II plant, had been earmarked for other uses. No material investment was incurred in relation to DME Phase II development. The Company after an in-depth review was of the view that the Group's resources should be focused on other areas with higher growth potential, such as the Guangdong Province, and directed Jiutai Zhangjiagang to apply for the Reduction in Registered Capital.
The Reduction in Registered Capital is not expected to have any material impact on the Company's or the Group's net tangible assets per share or earnings per share for the current financial year.
None of the Directors or substantial shareholders of the Company has any direct or indirect interest in the Reduction in Registered Capital.

BY ORDER OF THE BOARD Cui Lianguo Chairman and Chief Executive Officer 28 November 2011

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